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EXHIBIT 10.17(g)
AMENDMENT
AMENDMENT, dated as of December 29, 1997 (this "Amendment"), between
AAMES CAPITAL CORPORATION, a California corporation (the "Borrower"), and
PRUDENTIAL SECURITIES CREDIT CORPORATION, a Delaware corporation (the "Lender")
to the Interim Loan and Security Agreement, dated as of November 22, 1996,
between the Borrower and the Lender (as amended by (i) that certain Amendment,
dated as of August 19, 1997, between the Borrower and the Lender, and (ii) that
certain Letter of Amendment, dated as of December 12, 1997, between the Borrower
and the Lender and as modified by that certain (i) Notice of Extension of
Agreement No. 1, dated May 15, 1997 with effect as of Xxxxx 00, 0000, (xx)
Notice of Extension of Agreement No. 2, dated as of September 26, 1997, and
(iii) Notice of Extension of Agreement No. 3, dated as of December 29, 1997, and
as otherwise amended, supplemented or otherwise modified prior to the date
hereof, the "Agreement").
RECITALS
The Borrower has requested the Lender to agree to amend certain
provisions of the Agreement as set forth in this Amendment. The Lender is
willing to agree to such amendments, but only on the terms and subject to the
conditions set forth in this Amendment.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Borrower and the Lender hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in the
Agreement are used herein as therein defined.
2. Amendments. (a) Subsection 5(a)(iv) of the Agreement is hereby
amended by deleting the date "September 30, 1996" set forth therein and
substituting in lieu thereof the date "September 30, 1997";
(b) Subsection 5(a)(vii) of the Agreement is hereby amended by deleting
the date "September 30, 1996" set forth therein and substituting in lieu thereof
the date "June 30, 1997";
(c) The Agreement is hereby amended by deleting subsection 7(f) and
substituting in lieu thereof a new subsection 7(f) to read in its entirety as
follows:
"(f) Notices. The Borrower will notify the Lender promptly, in
reasonable detail and in accordance with Section 21 of this Agreement,
(i) of any lien or security interest (other than security interests
created hereby) on, or claim asserted against, any of the Collateral,
(ii) of the occurrence of any other event which could reasonably be
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expected to have a material adverse effect on the aggregate market
value of the Collateral or on the security interests created hereunder,
(iii) of the existence of circumstances requiring the Borrower, or
permitting the Lender to require the Borrower, to prepay the Advances
pursuant to Section 2(l), Section 8(b) or Section 12 hereof, (iv) of
any amendments or waivers to the covenants applicable to the Guarantor
under that certain Indenture of Trust, dated as of February 1, 1995 (as
amended from time to time, the "10.50% Senior Note Indenture"), between
the Guarantor and Bankers Trust Company of California, N.A., as
trustee, and relating to the issuance by the Guarantor of $23,000,000
of 10.50% Senior Notes due 2002 (the "10.50% Senior Notes"), and (v) of
any amendments or waivers to the covenants applicable to the Guarantor
under those certain Indenture and First Supplemental Indenture, each
dated as of October 21, 1996 (together with the 10.50% Senior Note
Indenture and as amended from time to time, the "Aames Note
Indentures"), between the Guarantor and The Chase Manhattan Bank, as
trustee, and relating to the issuance by the Guarantor of $150,000,000
of 9.125% Senior Notes due 2003 (together with the 10.50% Senior Notes,
the "Senior Notes").";
(d) The Agreement is hereby amended by deleting subsection
7(i) and substituting in lieu thereof a new subsection 7(i) to read in
its entirety as follows:
"(i) Line of Credit. The Borrower shall maintain in
full force and effect the Amended and Restated Mortgage Loan
Warehousing Agreement, dated as of January 15, 1997, among the
Borrower, the Guarantor, the lenders from time to time parties
thereto and NationsBank of Texas, N.A., as administrative
agent (the "NationsBank Credit Agreement"), providing for a
credit commitment of not less than $350,000,000 (or a
substitute bank credit line with such lenders, providing for a
credit commitment of not less than $350,000,000 and upon such
terms as shall be satisfactory to the Lender) (the NationsBank
Credit Agreement or such substitute credit agreement being
referred to herein as the "Bank Credit Agreement"), and the
Borrower shall not consent to any amendment, supplement or
modification to the Bank Credit Agreement which would have a
material adverse effect on the Lender's rights and remedies
hereunder or under the Intercreditor Agreement, without the
prior written consent of the Lender.";
(e) Section 12 of the Agreement is hereby amended by deleting
the number "five (5)" set forth therein and substituting in lieu
thereof the number "ten (10)";
(f) Subsection 13(j) of the Agreement is hereby amended by
deleting the words "Aames Note Indenture" set forth therein and
substituting in lieu thereof the words "Aames Note Indentures"; and
(g) Section 22 of the Agreement is hereby amended by deleting
the words "Aames Note Indenture" set forth therein and substituting in
lieu thereof the words "Aames Note Indentures".
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3. Effectiveness. This Amendment shall become effective upon receipt by
the Lender of evidence satisfactory to the Lender that this Amendment has been
executed and delivered by the Borrower and the Guarantor. In addition, it shall
be a condition subsequent to effectiveness of this Amendment that the Agent
shall have received, within 7 days following the date hereof, an opinion of
counsel to the Borrower, substantially in the form of Exhibit A hereto.
4. Representations and Warranties. To induce the Lender to enter into
this Amendment, the Borrower hereby represents and warrants to the Lender that,
after giving effect to the amendment provided for herein, the representations
and warranties contained in the Agreement, the Custodial Agreement and the
Guarantee will be true and correct in all material respects as if made on and as
of the date hereof and that no Default or Event of Default will have occurred
and be continuing.
5. No Other Amendments. Except as expressly amended hereby, the
Agreement, the Secured Note, the Custodial Agreement and the Guarantee shall
remain in full force and effect in accordance with their respective terms,
without any waiver, amendment or modification of any provision thereof.
6. Counterparts. This Amendment may be executed by one or more of the
parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
7. Expenses. The Borrower agrees to pay and reimburse the Lender for
all of the out-of-pocket costs and expenses incurred by the Lender in connection
with the preparation, execution and delivery of this Amendment, including,
without limitation, the reasonable fees and disbursements of Cadwalader,
Xxxxxxxxxx & Xxxx, counsel to the Lender.
8. Applicable Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the day and year first above written.
AAMES CAPITAL CORPORATION
By: /s/ Xxxx X. Xxxxxx
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Title:
PRUDENTIAL SECURITIES CREDIT CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
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Title:
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The undersigned Guarantor hereby consents and agrees to the foregoing
Amendment:
AAMES FINANCIAL CORPORATION
By: /s/ Xxxx X. Xxxxxx
--------------------------
Title:
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EXHIBIT A
[LETTERHEAD OF COUNSEL TO THE BORROWER AND THE GUARANTOR]
December __, 1997
Prudential Securities Credit Corporation
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Gentlemen:
I am counsel to Aames Capital Corporation, a California
corporation (the "Borrower"), and Aames Financial Corporation, a Delaware
corporation (the "Guarantor"), and have acted as such in connection with the
execution and delivery of the following documents:
(i) the Interim Loan and Security Agreement, dated as of
November 22, 1996 (the "Original Interim Loan Agreement"), between
Prudential Securities Credit Corporation (the "Lender") and the
Borrower;
(ii) the Secured Note (the "Original Note") dated November 22,
1996, made by the Borrower in favor of the Lender, the Endorsement,
dated March 31, 1997, to the Secured Note ("Endorsement No. 1"); the
Endorsement, dated December 12, 1997, to the Secured Note ("Endorsement
No. 2"; the Original Note, as amended by Endorsement No. 1 and
Endorsement No. 2 is referred to as the "Note");
(iii) the Custodial Agreement, dated as of November 22, 1996,
(the "Custodial Agreement"), among the Borrower, the Lender and Bankers
Trust Company of California, N.A. (the "Custodian");
(iv) the Intercreditor and Joint Shipment Agreement, dated as
of November 22, 1996 (the "Intercreditor Agreement"), among NationsBank
of Texas, N.A. and the Custodian, as joint custodians, the Lender and
the Borrower;
(v) the Guarantee, dated as of November 22, 1996 (the
"Guarantee"), made by the Guarantor in favor of the Lender;
(vi) the Notice of Extension of Agreement No. 1, dated May 15,
1997 with effect as of March 31, 1997 ("Notice of Extension No. 1"),
between the Borrower and the Lender, the Notice of Extension of
Agreement No. 2, dated September 26, 1997
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("Notice of Extension No. 2"), between the Borrower and the Lenderand
the Notice of Extension of Agreement No. 3, dated as of December ___,
1997 ("Notice of Extension No. 3"; together with Notice of Extension
No. 1 and Notice of Extension No. 2, the "Notices of Extension"),
between the Borrower and the Lender; and
(vii) the Amendment, dated as of August 19, 1997 (the "First
Amendment"), between the Borrower and the Lender, the Letter of
Amendment, dated as of December 12, 1997 (the "Letter of Amendment"),
between the Borrower and the Lender, and the Amendment, dated as of
December ___, 1997 (the "Third Amendment" and, together with the First
Amendment and the Letter of Amendment, the "Amendments"; the Original
Interim Loan Agreement, as amended by the Notices of Extension and the
Amendments, is referred to as the "Interim Loan Agreement"), between
the Borrower and the Lender.
This opinion is being delivered to you pursuant to Section
3(b) of the Third Amendment. Capitalized terms used herein and not defined
herein shall have the meanings assigned to them in the Interim Loan Agreement.
I have examined executed copies of the Interim Loan Agreement,
the Note, the Intercreditor Agreement, the Custodial Agreement, the Guarantee,
the Notices of Extension and the Amendments. I have also examined originals or
photostatic or certified copies of all such corporate records of the Borrower,
and such certificates of public officials, certificates of corporate officers,
and other documents, as I have deemed appropriate and necessary as a basis for
the opinions hereinafter expressed. In making my examination and rendering the
opinions hereinafter expressed I have assumed that each party to each of the
Interim Loan Agreement, the Intercreditor Agreement, and the Custodial Agreement
(other than the Borrower) has the corporate power to enter into and perform all
of its obligations thereunder, (ii) the due authorization, execution and
delivery of each of the Interim Loan Agreement, the Intercreditor Agreement and
the Custodial Agreement by the parties thereto (other than the Borrower) and
(iii) the validity and binding effect on the parties thereto (other than the
Borrower) of each of the Interim Loan Agreement, the Intercreditor Agreement and
the Custodial Agreement.
The opinions expressed below with respect to enforceability
are subject to the following additional qualifications:
(a) The effect of bankruptcy, insolvency, reorganization,
moratorium, receivership, or other similar laws of general
applicability relating to or affecting creditors' rights generally in
the event of bankruptcy, insolvency, reorganization, moratorium or
receivership.
(b) The application of general principles of equity,
including, but not limited to, the right of specific performance
(regardless of whether enforceability is considered in a proceeding in
equity or at law).
Based upon the foregoing, I am of the opinion that:
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1. The Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the State of California.
2. The Borrower has the corporate power and legal right to
execute and deliver the Third Amendment, to borrow under the Interim Loan
Agreement, as amended by the Amendments, and the Note, and to grant liens under
the Interim Loan Agreement, and has taken all necessary corporate action to
authorize such borrowing and such granting of liens upon the terms and
conditions of the Interim Loan Agreement, and to authorize the execution and
delivery of the Third Amendment. The Borrower is duly licensed as a licensee or
is otherwise qualified in each state in which its ownership of property or the
conduct of its business requires such licensure or qualification and where
failure to be so licensed or qualified would have a material adverse effect on
the business of the Borrower, on the Collateral, on the ability of the Borrower
to pay or perform the Secured Obligations or on the rights and remedies of the
Lender under the Interim Loan Agreement, the Note, the Custodial Agreement, the
Intercreditor Agreement or the Guarantee, and the Borrower is, to our knowledge,
in compliance in all material respects with each such state's applicable
statutes, laws, rules and regulations. No consent of any other Person
(including, without limitation, stockholders of the Borrower), and no consent,
license, permit, approval or authorization of, or registration or declaration
with, any governmental authority, bureau of agency is required connection with
the execution and delivery of the Third Amendment or the enforceability of each
of the Interim Loan Agreement, and the Note.
3. Each of the Interim Loan Agreement, the Note, the
Intercreditor Agreement and the Custodial Agreement constitutes the legal,
valid, and binding obligation of the Borrower enforceable against the Borrower
in accordance with its respective terms.
4. The Guarantee constitutes the legal, valid, and binding
obligation of the Guarantor enforceable against the Guarantor in accordance with
its terms.
5. The execution and delivery of the Third Amendment and the
performance of each of the Interim Loan Agreement, and the Note will not violate
any provision of any existing Federal laws or the laws of the State of
California or of the charter or by-laws of the Borrower or of any mortgage,
indenture, contract or other undertaking to which, to the best of my knowledge
(after due inquiry), the Borrower is a party or which is binding upon it or its
assets, and, to the best of my knowledge (after due inquiry), will not result in
the creation or imposition of any lien, charge or encumbrance on any of its
assets pursuant to the provisions of any of the foregoing.
6. No litigation or administrative proceeding of or before any
governmental authority or court is currently pending, or, to the best of my
knowledge (after due inquiry), threatened, against the Borrower or its assets,
the liability with respect to which is likely to be material to the financial
position or results of operations of the Borrower.
7. Assuming that the Lender acquired the promissory notes (the
"Mortgage Notes") evidencing the Mortgage Loans for value, the Interim Loan
Agreement creates in favor of the Lender a security interest under the Uniform
Commercial Code (the "UCC") as
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currently in effect in New York in all rights of the Borrower in the Mortgage
Notes. Provided that on the date hereof (i) the Custodian has acquired and
maintains continuous possession of the Mortgage Notes within the State of
California and (ii) the Custodian is acting on behalf of the Lender in
accordance with the terms of the Custodial Agreement and no other agreements or
understandings, written or oral, govern the relationship between the Custodian
and the Lender, then, the security interest in the Mortgage Notes granted by the
Borrower to the Lender will be, on the date of possession of the Mortgage Notes
by the Custodian, perfected and prior to any other security interest which can
be perfected under the Uniform Commercial Code as currently in effect in
California.
I am admitted to practice law in the State of California, and
the foregoing opinions are limited to the Federal laws of the United States, the
Delaware General Corporation Law and the laws of the State of California. I note
that the Interim Loan Agreement, the Note, the Custodial Agreement and the
Guarantee are governed by the law of the State of New York and, with your
consent, I have assumed for purposes of Paragraphs 3, 4 and the first sentence
of Paragraph 11 of this opinion that the law of the State of New York is
identical to the law of the State of California.
Sincerely yours,
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